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Hebei
Farewell, Beijing
Large wholesale markets are moving out of Beijing
By Yuan Yuan | NO. 8 FEBRUARY 25, 2016

 
People carry bags of goods from a newly built large market in Langfang, Hebei Province, on January 14, 2015. Many retailers from wholesale markets in Beijing have moved here in the past year (XINHUA)

For the 10th year in a row, Jiang Shaoxia made the 700 km journey back to Beijing from her hometown in central China's Henan Province on February 13, right after the annual Spring Festival. But 2016 could mark the last year she makes the trek.

Jiang owns a hat store at Beijing's largest accessories wholesale market, Tianyi wholesale market, located in the downtown area of the capital. She started her business in 2006, which later developed into a full-fledged store. Her main customers are wholesale dealers across the country.

Shoppers can buy everything from daily necessities to various gadgets, all on a budget. Built in the shape of building blocks, Tianyi looks like it would be better placed as a castle in a fairy tale cartoon than as a shopper's mecca in a major world city. Thousands come to the market every day and return fully loaded.

But buyers will soon need to find a new shopping paradise as Beijing's wholesale markets are forced out. "We thought we could do business here forever until we heard the news that wholesale markets will be moved out of Beijing," Jiang told Beijing Review .

Time to go

Beijing's supersized wholesale markets are moving to the neighboring Hebei Province and Tianjin Municipality, where some logistics zones and larger markets will be built. The agreement was signed in 2014 between Langfang, a city in Hebei and Xicheng District of Beijing, after President Xi Jinping called for more integrated development of the regions surrounding China's capital city in 2013.

Opened in 1992, the Tianyi market houses more than 2,000 vendors who run 1,550 stalls. But this is just a drop in the bucket compared to the size of the wholesale markets near the Beijing Zoo on the northwest side of the city.

The Zoo Market, which can be seen across the street from the zoo's entrance, was first formed in the late 1980s and has since developed to be north China's largest clothing market. It boasts 12 markets with 13,000 booths, more than 30,000 employees and over 100,000 customers which pass through its doors each day.

For years, locals have interpreted someone saying, "I am going to the zoo," to mean they are going shopping rather than to visit the animals nearby. The clothing market's popularity far surpasses that of the local pandas.

Early each morning, retailers from across Beijing and other regions in the country flock to the hub to fill their shelves. Located just a couple of subway stops away from the area where major universities are clustered in, the clothing market zone is also popular among college students for its low prices and variety.

"It has brought us a lot of fun memories," said Qiu Xiaoqi, a Renmin University graduate told Beijing Review . "Wholesalers get a much lower price than regular buyers, so we always tried to pretend to be a wholesaler."

Qiu once used this trick to buy a pair of jeans for just 10 yuan ($1.50). "The pants are good quality and I still wear them," Qiu said. "Future students won't get these experiences, but the markets need to move because the traffic nearby is getting much worse and the environment around them is mostly dirty and messy as well."

Indeed, with buyers swarming the markets each day, traffic around the zoo has long been a headache for the local government.

The approximately 20,000 commercial tenants in the zoo wholesale zone contribute 60 million yuan ($9.8 million) in annual revenue to Xicheng District, but it costs the government nearly 100 million yuan ($15 million) to handle the associated transportation and environmental issues, according to Wang Ning, Party chief of the Xicheng District committee.

In 2014, 1,300 booths, about 10 percent of the stores in the zone, were shut down. In January 2015, the Tianhaocheng Clothing Mall was the first to close door.

Dai Yanxia, a 35-year-old shoe seller at Tianhaocheng, cleared out her merchandise by lowering the price for a pair of shoes from 100 yuan ($15) to 40 ($6).

"It is even lower than the amount we paid for them, but we had to do it," she told CCTV News in an interview. Two years ago, Dai was named one of Tianhaocheng's outstanding vendors for her high sales volume.

"We signed a 20-year contract with the mall and it still has eight years before it expires," Dai said. "The mall paid our deposit back, and I cleared the shoes out. I sold hundreds of shoes but lost 20,000 yuan ($3,000) in the end."

She moved to Langfang, where some new wholesale markets have been built or are currently under construction for relocating vendors like her. Rent prices and the cost of living is far lower there, but so far sales are nowhere close what vendors made in the capital.

Zheng Xiulin, a 29-year-old migrant from east China's Anhui Province, has been a shop owner at the Shiji Tianle market near the zoo since 2008. "Opening a shop here has been my dream since I graduated from high school," Zheng told Beijing Review .

Zheng pays about 15,000 yuan ($2,300) a month in rent for the shop and on a good business day can make about 2,500 yuan ($380). He is undecided if he'll relocate from Beijing or stay and switch to another business venture.

The Julong Clothing Mall, the zoo area's first underground clothing market, shut its doors on December 31, 2015. For days before its closing date, customers squeezed in to say farewell with one final purchase.

"I live nearby and coming here has almost become a monthly hobby," Beijing resident Lin Qing told Beijing Review . "It is different from online shopping. Here you can touch the clothes, try them on and the most interesting part is bargaining with the sellers."

The end of 2015 saw 60 percent of the stalls in the zoo wholesale zone shut down.

"It is like the end of an era, but we have to accept it," Lin said.

The new location

Shoppers are cringing after seeing their favorite markets being relocated, but economists say the move will ultimately benefit the surrounding regions and help alleviate problems in Beijing.

"Pollution, traffic and population pressures in the capital are becoming too serious to ignore. It is time to slim the capital," Zhu Erjuan, a professor at the Capital University of Economic and Business told Xinhua News Agency.

Moreover, the move will help neighboring regions, Tianjin and Hebei Province, that have trailed behind the capital in public resources and services.

"If the planned integration for the region is to succeed, the gap between the outlining regions and Beijing needs to be filled," said Zhao Jimin, an associate researcher with the Beijing Academy of Social Sciences.

"It is necessary to provide neighboring regions with talent so they can enjoy similar levels of education, healthcare and social security," Zhao said.

According to a report from China Business Journal in December 2015, the capital plans to renovate and relocate four downtown wholesale markets: the Beijing Zoo markets, the Xinfadi farm produce market, the Shilihe building materials market and the Dahongmen clothing market.

The Dahongmen market in the Fengtai District on the southwest side of the city began its relocation process in 2014.

"The storage facilities for the Dahongmen wholesale market hub will be moved to suburban areas or Hebei Province, while the delivery service department of the hub will remain in Beijing," Liu Yu, deputy chief of the Fengtai District Government, told China News Service.

Shi Ankai was among the first 600 vendors who chose to move to Baigou, a wholesale area in Hebei Province's Baoding. The move allowed him to expand his stall from 4 square meters to 24 square meters.

"The cost here is just one 10th of that in Beijing," Shi told Xinhua. "Even though it seems that the sales volume has gone down, calculating everything in, it is still a bargain."

Close to 2,000 retailers have followed suit. Lu Jiansheng, from east China's Zhejiang Province, has been doing business in Beijing since 2005 and has seen how Beijing's markets have changed over the past decade.

In 2009, the Beijing Municipal Government announced a plan for the southern part of the city, aiming to upgrade the infrastructure and transportation of this less-developed part. The wholesale markets in Daxing and Fengtai districts, both included in the southern part, would unavoidably be affected.

As the Vice Director of Zhejiang Chamber of Commerce in Beijing, Lu decided to do something for his fellow businessmen from his home province.

After visiting several locations around Beijing, Lu finally chose Yongqing County in Langfang as the new location and named the new wholesale market the Yongqing International Clothing Market.

"After living in Beijing for decades, many business people's lives are integrated with the city and they don't want to go too far," Lu said in an interview with Sohu.com. "Yongqing is very close to Beijing, only half an hour away by car."

At the new market, vendors can own their own clothing factory as well as sell their clothes from a stall.

"The rapid development of e-commerce has impacted the traditional clothing and small commodity wholesale markets, which need to move to lower-tier cities outside Beijing, but the traditional business needs to seek breakthroughs as well," Lu said.

The original location of the Tianhaocheng market, the first market to close, will be renovated for technology incubators and "high-end" industries, such as e-commerce, financial services and clothing design.

Beijing's population increased to 21.70 million at the end of 2015. The Central Government has announced that it will control the city's size in a bid to ease pressure on urban resources.

"Relocating a single market will not solve all these problems but it is a practical attempt," said Sheng Guangyao, an associate research fellow with the Chinese Academy of Social Sciences. "The capital can benefit a lot from regional cooperation. It should not only slim down, but also shape up."

Copyedited by Jordyn Dahl

Comments to yuanyuan@bjreview.com

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